On August 10, the China Banking and Insurance Regulatory Commission released data on the main regulatory indicators of the banking and insurance industry in the second quarter of 2020. In the first half of this year, commercial bank profits rarely dropped by 9.4% year-on-year, with a cumulative net profit of 10,000 billion, the bank's non-performing loan ratio climbed to a high in recent years at the end of the second quarter, rising 0.03 percentage points quarter-on-quarter to 1.94%.
From the perspective of asset size, as of the end of the second quarter, the domestic and foreign currency assets of my country’s banking financial institutions have grown rapidly, with a year-on-year increase of 9.7% to 309.4 trillion yuan. Looking at different types of institutions, The scale of joint-stock banks expanded rapidly, at 11.8%, with domestic and foreign currency assets reaching 55.7 trillion yuan, accounting for 18.0% of the total assets of commercial banks; the total assets of large commercial banks increased by 10.1% year-on-year.
From the perspective of profitability, commercial banks achieved a cumulative net profit of 1.0 trillion yuan in the first half of the year. Net profit experienced a rare year-on-year decline of 9.4%; the average asset profit rate dropped from the end of the previous quarter. 0.15 percentage points, or 0.83%.
In terms of risk resistance, at the end of the second quarter, the balance of loan loss provisions of commercial banks was 5.0 trillion yuan, an increase of 206 billion yuan from the end of the previous quarter; the provision coverage rate was 182.4%, an increase of 206 billion yuan from the end of the previous quarter. dropped by 0.80 percentage points.
In terms of asset quality, the non-performing loan ratio of commercial banks climbed to a high point in recent years at the end of the second quarter. The non-performing loan ratio increased by 3bp from the end of the first quarter to 1.94%. The balance of non-performing loans 2.74 trillion yuan, an increase of 124.3 billion yuan from the previous month.
In addition, the three indicators of capital adequacy ratio of commercial banks are all in the downward channel. The core tier one capital adequacy ratio, tier one capital adequacy ratio and capital adequacy ratio are 10.47%, 11.61% and 14.21% respectively. , respectively decreased by 0.41 percentage points, 0.34 percentage points and 0.31 percentage points from the end of the previous quarter.
Dong Ximiao, chief researcher of Merchants Union Financial, analyzed this. In the first half of this year, the net profit of my country's commercial banks fell by 9.4% year-on-year, and the average capital profit rate and asset profit rate also declined. This has been very unusual in recent years. This is rare, mainly due to the impact of the new coronavirus and increased benefits to the real economy.
He said that in the first half of the year, as the downward pressure on the economy increased, coupled with the impact of the epidemic, my country's real economy encountered a greater impact. While increasing credit, commercial banks have actively provided benefits to the real economy through measures such as lowering loan interest rates, reducing or exempting fees, and deferring principal and interest payments, driving a significant decline in corporate financing.
The year-on-year decline in net profit is not the deterioration of commercial banks' own operating capabilities, but the result of commercial banks' substantial profit transfer to entities. It is a reflection of the courage of banking financial institutions to take on responsibilities and overcome difficulties. At the same time, in the face of rebounding pressure on asset quality, commercial banks increased loan loss provisions. Loan loss provisions increased by 500.3 billion yuan compared with the end of the previous year (including an increase of 294.3 billion yuan in the first quarter and an increase of 206 billion yuan in the second quarter), which was also to a certain extent. affected profitability performance.
Dong Ximiao said that the non-performing asset loan ratio of commercial banks may increase in 2020, and the non-credit non-performing asset industry may also explode further. In this regard, he suggested that commercial banks should take various measures to speed up the disposal of existing non-performing assets on the one hand; on the other hand, they should adhere to standards, strictly control and strictly control the generation of new non-performing assets. Regulatory authorities must continue to take targeted measures to support commercial banks, especially small and medium-sized banks, in disposing of non-performing assets through multiple channels and efficiently.
Daily Economic News